Page 6 - SCBJ-201703
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South China Business Journal
CHINA BRIEFING On April 8, 2016, Chinese authorities prominent food safety scandal occurred in overseas products, and instead choose
released an updated “positive list” 2008, when the sale of tainted milk powder from the existing foreign brands. Though
for goods imported through cross border led to more than 300,000 infants being new investors may lose connections with
e-commerce (CBEC). Pet food are included on harmed. that customer segment, licensed foreign
the list for the first time. This new regulatory pet food manufacturers will continue to
Navigating
update presents a substantial benefit from sales growth due
e-commerce opportunity for to well-established brand
foreign pet food companies, awareness, competitive
however, uncertainties Cross Border price advantages, and low
cost and speedy delivery.
and risks accompany these
new opportunities, as new
integrated tax policies for CBEC E-Commerce The regulatory un-
and the pre-existing “negative certainty
list” exert impacts on foreign
While the new “positive
investment. Regulations list” includes pet food, the
The opportunities for “negative list” excludes
certain animal feeds, such
foreign brands in China’s Pet as meat meal, bone meal,
Since global food and drink Food Industry animal-derived medicines,
conglomerates Mars, Inc. and other unspecified
and Nestle S.A. attained feeds. Inclusion of pet food
sweeping success in China in on the “positive list” seems
the early 2000s, numerous to be good news for foreign
market research analyses have investment at first glance,
projected enormous growth but when it comes to the
momentum in China’s pet food implementation level, further legal
industry. Their confidence in China’s pet The tax treatment of pet food due diligence is essential for any new market
food sector is fundamentally based on the imported through CBEC entrant.
reality that around 75 percent of pet owners Due to uncertainties brought by the new
in China still do not feed their animals with integrated tax policies for CBEC, however, In general, both licensed foreign pet food
commercial pet food. However, the use of and counteractions hidden in the “negative manufacturers and new foreign pet food
commercial pet food is expected to become list”, foreign investors are not necessarily companies will encounter different types
more widespread going forward, with GfK guaranteed immediate success. As new of barriers in the process of achieving
projecting online pet food sales growth in integrated tax policies for CBEC means that sales growth. Nonetheless, new regulatory
China to reach 43 percent for 2016. the overall tax burden on consumers will changes open an e-commerce channel for
exceed 10 percent, the price of imported pet more foreign investment to enter China’s
In addition to the promising growth potential food products will be significantly higher. pet food market. With the increasingly
in the pet food industry, the growing food diversified demands of China’s pet owners,
safety concerns among Chinese citizens In the short term, e-commerce platforms foreign brands specializing in different pet
encourages more and more middle and have been absorbing the price of the food products have the chance to establish
upper class pet owners to choose reliable integrated tax for online buyers as a sales their respective market niches when
foreign-branded pet food over domestic promotion to win greater market share. navigating the choppy waters of China’s
options. In recent years, a sequence of food However, in the long run, integrated tax cross border e-commerce.
safety incidents associated with Chinese will eventually be passed onto online
food manufacturers have weakened the buyers. Consumers who prefer to enjoy low The article was first published by China Briefing.
nation’s trust in national brands. The most tax benefits might turn away from pricier
4 Photo from pixabay.com
CHINA BRIEFING On April 8, 2016, Chinese authorities prominent food safety scandal occurred in overseas products, and instead choose
released an updated “positive list” 2008, when the sale of tainted milk powder from the existing foreign brands. Though
for goods imported through cross border led to more than 300,000 infants being new investors may lose connections with
e-commerce (CBEC). Pet food are included on harmed. that customer segment, licensed foreign
the list for the first time. This new regulatory pet food manufacturers will continue to
Navigating
update presents a substantial benefit from sales growth due
e-commerce opportunity for to well-established brand
foreign pet food companies, awareness, competitive
however, uncertainties Cross Border price advantages, and low
cost and speedy delivery.
and risks accompany these
new opportunities, as new
integrated tax policies for CBEC E-Commerce The regulatory un-
and the pre-existing “negative certainty
list” exert impacts on foreign
While the new “positive
investment. Regulations list” includes pet food, the
The opportunities for “negative list” excludes
certain animal feeds, such
foreign brands in China’s Pet as meat meal, bone meal,
Since global food and drink Food Industry animal-derived medicines,
conglomerates Mars, Inc. and other unspecified
and Nestle S.A. attained feeds. Inclusion of pet food
sweeping success in China in on the “positive list” seems
the early 2000s, numerous to be good news for foreign
market research analyses have investment at first glance,
projected enormous growth but when it comes to the
momentum in China’s pet food implementation level, further legal
industry. Their confidence in China’s pet The tax treatment of pet food due diligence is essential for any new market
food sector is fundamentally based on the imported through CBEC entrant.
reality that around 75 percent of pet owners Due to uncertainties brought by the new
in China still do not feed their animals with integrated tax policies for CBEC, however, In general, both licensed foreign pet food
commercial pet food. However, the use of and counteractions hidden in the “negative manufacturers and new foreign pet food
commercial pet food is expected to become list”, foreign investors are not necessarily companies will encounter different types
more widespread going forward, with GfK guaranteed immediate success. As new of barriers in the process of achieving
projecting online pet food sales growth in integrated tax policies for CBEC means that sales growth. Nonetheless, new regulatory
China to reach 43 percent for 2016. the overall tax burden on consumers will changes open an e-commerce channel for
exceed 10 percent, the price of imported pet more foreign investment to enter China’s
In addition to the promising growth potential food products will be significantly higher. pet food market. With the increasingly
in the pet food industry, the growing food diversified demands of China’s pet owners,
safety concerns among Chinese citizens In the short term, e-commerce platforms foreign brands specializing in different pet
encourages more and more middle and have been absorbing the price of the food products have the chance to establish
upper class pet owners to choose reliable integrated tax for online buyers as a sales their respective market niches when
foreign-branded pet food over domestic promotion to win greater market share. navigating the choppy waters of China’s
options. In recent years, a sequence of food However, in the long run, integrated tax cross border e-commerce.
safety incidents associated with Chinese will eventually be passed onto online
food manufacturers have weakened the buyers. Consumers who prefer to enjoy low The article was first published by China Briefing.
nation’s trust in national brands. The most tax benefits might turn away from pricier
4 Photo from pixabay.com
